MWB reduces debt but admits ‘challenging’ year ahead

In its half-year report released today, the Group, which has recently appointed a new chief executive (Gary Davis)​ and financial director (Paul Roberts), saw occupancy and RevPARacross the hotel division little-changed on the same period last year, while average room rates rose to £108 from £107.

“We expect the next six months to continue to be challenging,” said Eric Sanderson, chairman of MWB Group. “There are both positive and negative aspects to the current trading environment in which we operate and we will continue to seek to take advantage of the positive and mitigate the negative.

“Results for the six months to 31 December 2011 for our hotels division reflect the more difficult trading conditions. Combined revenues for the two brands advanced to £59.5m against £58.8m for the comparable period, in part reflecting the additional revenues from the new Bistro du Vin openings.

“We recognise that, even in the current climate, businesses must continue to develop their brand recognition and grow.”

New hotel and operational initiatives

Malmaison recently agreed terms for a new 91-bed hotel in Dundee.​ Work on the building gets underway this Spring and is expected to be completed in May 2013.

“Hotel and restaurant trading over the remainder of the current financial year is likely to be difficult,” added Sanderson. “But we believe that with the operational initiatives being introduced by the new management team we can maintain both occupancy and room rates and, in tandem with rigorous review of the cost base, improve yield.”

Last year, BigHospitality reported that the Group had come to an agreement with lenders to extend its 282.5m fascility for Malmaison to the end of 2014​ – an agreement which was crucial for the reduction of debt.

Total revenue for the last six months of MWB’s serviced office division has since risen to almost £60.0m against £55.1m for the comparable period a year ago. A doubling of EBITDA to £1.0m from £0.5m has also been achieved, while pre-tax losses have been reduced to £2.0m from £2.8m.